Comparative analysis of REDD+ benefit sharing mechanisms for Efficiency,

Effectiveness and Equity

Maria Brockhaus, Cecilia Luttrell, Grace Wong,Pham T.T.,, L.N. Dung, J.S. Tjajadi, L. Loft, and S. Assembe Mvondo

Warsaw, 18/11/2013

Presentation Outline

Definition of benefit sharing

Review of benefit sharing mechanisms in 13 countries

Discourses on effectiveness, efficiency and equity

Concluding thoughts

Some background

• REDD+ is moving through different phases,

• With introduction of performance based payments, it becomes important to link MRV systems to benefit (and cost) sharing systems

• Monitoring data gets more and more robust, but payment mechanisms, clear rules, and measures for performance are still lacking

What do we mean by ‘benefit sharing’

• Benefit sharing is the distribution of direct and indirect net gains from the implementation of REDD+

• Two types of direct benefits:• Monetary gains from international

and national finance related to REDD+

• Benefits associated with the increased availability of forest products & ecosystem services

• Indirect benefits e.g. improved governance infrastructure provision

What is a BSM

• Range of institutional means: governance structures and instruments that distribute finance and other net benefits from REDD+

– Direct incentives e.g. cash transfers,

– Policy and governance processes e.g. tenure clarification, law enforcement, agricultural intensification

Benefits come with costs: net benefits are what matter

• Direct financial outlays related to REDD+ (implementation and transaction costs)

• Costs arising from changes in forest land and resource use (opportunity costs)

• Cost recovery (compensation) vs. the surplus (REDD rent)

• Reviewed existing benefit-sharing mechanisms (BSMs) in REDD+ and forest management in 13 countries

• Evaluated BSMs for their potential 3E (effectiveness, efficiency and equity) outcomes, and risks

Global comparative analysisPham, T.T. et al. (2013)

Analysis of national REDD+ policies and processes in 13countries since 2009

http://www.forestsclimatechange.org/global-comparative-study-on-redd.html

• Only 4 countries (Vietnam, Indonesia, Brazil and Tanzania) have national REDD+ programmes that regulate the distribution of REDD+ finance

• BS tend to build upon existing models or practices in-country

• Conflicts of interest and governance issues have delayed implementation of REDD+ policies

• Characterised by minimal interaction between sectors

• Many of the “enabling factors” identified as necessary for achieving 3E BSMs are lacking in all countries

Key findings

BS proposals and policy at the national level

National level-proposals & activities Proposals financial arrangements

Brazil No national policy to date; state & sub-

state projects define own BS

arrangements ; Incl. few direct PES

schemes

Public funding: Amazon Fund & Bolsa Verde;

Indonesia Min. of Forestry regulations (2009 & 2012) projects need to obtain ministerial approval; number of projects without approval

Contested Min of Forestry (2009)

regulations specifies % to gov. project

developers and communities; Presidential

Taskforce designing parallel funding

mechanism

Vietnam Draft REDD+ strategy: benefits to be

shared between communities,

organisations and local authorities

Provincial level PES trialled

UNREDD+ proposes a National Fund

overseen by multi-stakeholder body;

revenues according to provincial

performance. Projects moving away from an

expectation of a voluntary market

REDD+ projects and their proposed and actual BSM in Tanzania

Project Details of BSMs

TFCG-Kilosa & Lindi

Dividends paid to village member of the village (under village by-laws); up-front funds & individual payments based on the potential average avoided emissions per year; village assemblies decide whether to use dividends on community projects

Mpingo Acquiring land certificates; boundary clarification; assistance in selling timber through FSC and land use and management plans. Originally the project planned to pass on profits to communities after deducting costs but this was controversial so now they are discussing a percentage arrangement

CARE Distribution of carbon revenues will use existing village savings and loan systems. The rights to carbon will be negotiated between CARE and the community through an exisiting intermediary organisation

Discourses on benefit sharing

Discourses on ‘who should benefit’?

There are tradeoffs involved in these choice implied by the different discourses which the implications for design of BSMs

Effectiveness/efficiency vs. equity discourses

Effectiveness/efficiency = goal of emission reductions

Equity = who has the right to benefit

Efficiency/Effectiveness discourse

REDD+ as a mechanism for paying forest users & owners to reduce emissions:

• Focus on emissions reductions

• Payments as incentive for those who change in behaviour

• Benefits should go to people providing these services

“REDD benefits should reward large-scale industries/companies for reducing forest emissions”

Data from CIFOR’s GCS’ policy network analysis by Levania Santosa & Moira Moeliano (Indonesia), Maria Fernanda Gebara & Shaozeng Zhang (Brazil)

Equity discourses

Equity discourses take a distributional perspective and ask who are the actors who have the „right“ to benefit from REDD+:

• Focus on preventing unfair distributional results

• Strengthening moral and political legitimacy of REDD+ mechanism

Equity Discourse I:

Benefits should go to those with legal rights

But no REDD+ country has legally defined carbon rights

Will existing tenure rights be the legal basis for REDD+ BS?

carbon rights not necessarily vested in rights to land or trees?

Distinct from right to benefit from sale

Will state claim carbon rights?

Risk that those without formal rights may lose out

Equity Discourse II:

Benefits should go to low emitting forest stewards

Many of these are low-emission situations

No additionality

A possible solution is a baseline definition based on future threats

Equity Discourse III:

Benefits should go to those incurring costs

Compensate for implementation, transaction and opportunity costs regardless of emission reductions

In early stages of REDD+ implementation there is a need to incentivize actors to get involved

Inputs are easier to define than to measure emissions reductions

Equity Discourse IV:

Benefits should go to effective facilitators of implementation

What is the ‘right’ proportion?

• to attract investors

• but prevent windfall profits?

Right for governments to retain some revenue for incurring implementation and transaction costs?

What‘s the exact level of costs occurring to government?

Negotiating choices:legitimacy of the process

Clarify objectives of national REDD+ implementation before designing BSMs

Clarity on objectives help to define who ‘should‘ benefit

Lack of clarity over what is the ‘competent agency’ with these decision making powers

Legitimacy of the decision needs the decision to be made by those with:• Legal mandate to make them• Adherence to due process & to procedural rights

Requires a legitimate decision-making process and institutions

Some further reading:

Pham, T.T., Brockhaus, M., Wong, G., Dung, L.N., Tjajadi, J.S., Loft, L., Luttrell C. and Assembe Mvondo, S.,

2013. Approaches to benefit sharing: A preliminary comparative analysis of 13 REDD+ countries. Working Paper 108. CIFOR, Bogor, Indonesia.

Luttrell, C., L. Loft, F. M. Gebara, D. Kweka, M. Brockhaus, A. Angelsen and W. Sunderlin 2013. Who should benefit from REDD+? Rationales and Realities. Ecology and Society. In press.

Assembe-Mvondo, S., Brockhaus, M., Lescuyer, G., 2013. Assessment of the Effectiveness, Efficiency and Equity of Benefit-Sharing Schemes under Large-Scale Agriculture: Lessons from Land Fees in Cameroon. European Journal of Development Research 25, 641-656.

Acknowledgements

This work is part of the policy component of CIFOR’s global comparative study on REDD (GCS). The methods and guidelines used in this research component were designed by Maria Brockhaus, Monica Di Gregorio and Sheila Wertz-Kanounnikoff. Parts of the methodology are adapted from the research protocol for media and network analysis designed by COMPON (‘Comparing Climate Change Policy Networks’).

Case leaders: Thuy Thu Pham (Nepal), Thuy Thu Pham & Moira Moeliono (Vietnam), Thuy Thu Pham and Guillaume Lestrelin (Laos), Daju Resosudarmo & Moira Moeliono (Indonesia), Andrea Babon (PNG), Peter Cronkleton, Kaisa Korhonen-Kurki, Pablo Pacheco (Bolivia), Mary Menton (Peru), Sven Wunder & Peter May (Brazil), Samuel Assembe & Jolien Schure (Cameroon), Samuel Assembe (DRC), Salla Rantala (Tanzania), Sheila Wertz-Kanounnikoff (Mozambique), Suwadu Sakho-Jimbira & Houria Djoudi (Burkina Faso), Arild Angelsen (Norway). Special thanks to our national partners from REDES, CEDLA, Libelula and DAR, REPOA, UEM, CODELT,ICEL, ForestAction, CIEM, CERDA, Son La FD, UPNG, NRI-PNG, and UMB.

Thanks to contributors to case studies, analysis and review : Levania Santoso, Tim Cronin, Giorgio Indrarto, Prayekti Murharjanti, Josi Khatarina, Irvan Pulungan, Feby Ivalerina, Justitia Rahman, Muhar Nala Prana, Caleb Gallemore (Indonesia), Nguyen Thi Hien, Nguyen Huu Tho, Vu Thi Hien, Bui Thi Minh Nguyet, Nguyen Tuan Viet and Huynh Thu Ba (Vietnam), Dil Badhur, Rahul Karki, Bryan Bushley, Naya Paudel (Nepal), Daniel McIntyre, Gae Gowae, Nidatha Martin, Nalau Bingeding, Ronald Sofe, Abel Simon (PNG), Walter Arteaga, Bernado Peredo, Jesinka Pastor (Bolivia), Maria Fernanda Gebara, Brent Millikan, Bruno Calixto, Shaozeng Zhang (Brazil), Hugo Piu, Javier Perla, Daniela Freundt, Eduardo Burga Barrantes, Talía Postigo Takahashi (Peru), Guy Patrice Dkamela, Felicien Kengoum (Cameroon), Felicien Kabamba, Augustin Mpoyi, Angelique Mbelu (DRC), Demetrius Kweka, Therese Dokken, Rehema Tukai, George Jambiya, Riziki Shemdoe, (Tanzania), Almeida Sitoe, Alda Salomão (Mozambique), Mathurin Zida, Michael Balinga (Burkina Faso), Laila Borge (Norway).

Special thanks to Efrian Muharrom, Sofi Mardiah, Christine Wairata, Ria Widjaja-Adhi, Cecilia Luttrell, Frances Seymour, Lou Verchot, Markku Kanninen, Elena Petkova, Arild Angelsen, Jan Boerner, Anne Larson, Martin Herold, Rachel Carmenta, Juniarta Tjajadi, Cynthia Maharani